WAEC Economics 2010 Theory — Question 18

Model answer

(i) Money as a measure of value: the value of goods and services are reflected in their prices, therefore money is used to measure the work or value of goods. Two goods may be of the same size but different prices; the value is not in the size but in the price, which is in terms of money. (ii) Money as a store of value: people produce goods and services which cannot be consumed all at once. The excess can be sold and kept as cash (money); people's assets can be kept for a longer period in the form of money.